KiwiSaver: Being overseas can delay eligibility for HomeStart grant

If you're planning on buying a newly built home, the subsidy doubles to $10,000 for individuals and $20,000 for couples. Photo / File

My partner has been a member of KiwiSaver for many years but because he was overseas for a long time he did not make any contributions for a number of years but he is back and has been contributing for the past two years. Will we still be eligible for the new build grant? Is there a minimum contribution that he needs to have been making in order to be eligible?

Getting the money together to buy, or in your case build, a new home can be assisted in a couple of ways with KiwiSaver.

Anyone in the market for a first home can apply to withdraw everything except the $1000 kick-start from their KiwiSaver account.

To do this you need to get in touch with your KiwiSaver provider, who will step you though the application process.

Those on modest incomes - an individual earning $80,000 or less or a couple earning $120,000 or less - can get some extra help from the Government with the KiwiSaver HomeStart grant.

The HomeStart grant - previously known as the First Home Deposit subsidy - gives eligible first-home buyers up to $5000 for individuals and up to $10,000 for couples to put towards the purchase of an existing home. This is on top of any money that is withdrawn from your KiwiSaver account.

If you're planning on buying a newly built home, the subsidy doubles to $10,000 for individuals and $20,000 for couples.

The grant application process is managed by Housing New Zealand, but there are some rules around making contributions to your KiwiSaver account.

Housing New Zealand had this to say: "To qualify for the KiwiSaver HomeStart grant you need to make regular contributions to your KiwiSaver scheme at the minimum percentage of your total income.

"If your partner had been overseas and made no contributions during this period, then clearly this will have a significant impact on his eligibility, as the years where no contributions were made cannot be counted towards the overall eligibility.

"However, if over the years he has made at least three years' worth of contributions at the required percentage of his income, then he may be eligible."

Housing New Zealand says the only way to find out is for your partner to complete an application and to send it to for consideration.

Housing New Zealand can advise if your partner meets the criteria or perhaps provide a better idea of when he is likely to be eligible.

When you head overseas for an extended period, you don't need to keep up payments into your KiwiSaver account - contributions from you and your employer will stop when you finish work - but you can continue to make voluntary payments while you're away.

These voluntary payments won't help towards the member tax credit, which you can get only while you're living in New Zealand, but can help towards eligibility for the HomeStart grant when you get back.

Unfortunately it's not possible to make any voluntary payments now to make up for the time your partner was overseas and not contributing.

The same situation can happen if you stay in New Zealand but take a contributions holiday.

Not keeping up a steady flow of contributions into your KiwiSaver account may rule you out for that extra boost from the HomeStart grant.

Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.

To have your KiwiSaver questions answered by the Herald's panel of industry players email Helen Twose, helen@helentwose.co.nz. Sorry, but Helen cannot answer all questions, correspond directly with readers, or give financial advice.